The Paradox of Post-Grant Patent Review

Kris Frieswick is senior editor at Inc. She is an award-winning journalist and editor whose work has appeared in a wide variety of national publications, including The Wall Street Journal, The Economist, The Boston Globe Magazine, Departures, and Hemispheres.

Congress passed the America Invents Act in 2011 with the aim of reducing patent suits. To that end, the law created a new administrative method, called a post-grant review, intended to help weed out bad patents without litigation.

Both versions of the bill passed by the Senate and House stated that if someone lost a patent challenge in a post-grant review, she could not then raise the same issues in court.

However, someone--it's unclear precisely who--slipped language into the final bill signed by President Barack Obama that prevents the challenger from going to court with any issue that "reasonably could have been raised" in the review.

In other words, let's say you challenged the validity of a patent in a post-grant review based on "prior art" (published evidence that the technology already existed before it was patented). If you were to lose in the post-grant review, you could never bring up that evidence in court and you couldn't raise any other objections to the patent that the judge believes you could have raised before.

This change makes the post-grant review a much less attractive option--and it essentially forces challengers to skip it and head directly to court.

"This is very problematic," says Carl Shapiro, a professor at the University of California Berkeley's Haas School of Business and a former member of President Obama's Council of Economic Advisers. Many people were excited that this law was creating a new system for challenging patents, he says, and this language could substantially weaken that system.

After Inc. raised the issue, a House Judiciary Committee aide issued this statement: "The change was made in error before the bill went to the floor and unfortunately, we didn't catch it before the vote. The correct language was in both the bill as introduced, as well as in the bill that was passed out of Committee. We do plan to correct it in a technical corrections bill that our staff is currently working on."